EQUITY dealer Q L Loh, 25, was shocked when she found out she had to pay almost $1,000 in interest after a vacation abroad.
She had charged $5,000 to her two credit cards for the holiday but could fork out only $2,000 in repayment when the bill arrived.
Ms Loh paid the remaining $3,000 over the next few months and incurred an additional interest of about $100 each month. 'I felt the pinch only when (the interest) snowballed to $1,000,' she said ruefully.
In the end, she took six months to clear her debt. Ms Loh is among a growing number of people who repay only a part of their debt instead of the full amount. They are known as 'revolvers'.
According to Credit Counselling Singapore (CCS), there were 417,000 revolvers in May, up four per cent from last June. Targeting this group of consumers, CCS and Citibank Singapore yesterday launched a creditmanagement programme called Use Credit Wisely.
The initiative includes public talks, an information booklet and a phone helpline for Citibank customers to seek help in restructuring their debt.
Said Mr Anil Wadhwani, Citibank Singapore's head of consumer markets: 'It's our responsibility to reach out to consumers and share good credit-management practices.'
CCS president Kuo How Nam told my paper that the average debtor in Singapore has a monthly disposable income of $2,700 and owes seven creditors up to $70,000. That means he has exhausted his disposable income two years in advance.
In the first half of this year, CCS handled 227 cases - almost double the 120 debtors it saw in the same period last year. Common causes of debt include overspending, loss of jobs or pay cuts, and business failures.
Six in 10 debtors below 30 years old cited overspending as one of the main reasons for their financial difficulties, said CCS.
According to figures from the Monetary Authority of Singapore, banks here wrote off $16.4 million in bad debt in May, up sharply from the $9.4 million written off in June last year.
-- MY PAPER